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January 25, 2022

BNI to buy majority stake in Bank Mayora to enter digital banking space

Indonesian government-backed lender Bank Negara Indonesia (BNI) is planning to buy a 63.92% stake in Bank Mayora, DeelStreestAsia has reported. 

The acquisition is part of BNI’s efforts to enter the digital banking space. 

The deal will see BNI acquire nearly 1.03 billion new shares and over 169 million shares owned by the World Bank affiliate International Finance Corporation (IFC).

IFC injected funds in Bank Mayora, a small-sized domestic lender, in 2015 and has supported its business development. 

“BNI will form a digital lender through inorganic strategy by taking over Bank Mayora which will be transformed into a digital bank,” the bank’s management was quoted by the publication as saying. 

The financial value of the deal, which will be effective in May 2022, was not disclosed. 

BNI will fund the acquisition using its retained earnings and not through any form of lending. 

Upon completion, BNI will own a 63.92% stake in Bank Mayora and the remaining 36.08% stake will be owned by Mayora Inti Utama.

Center of Economic and Law Studies director Bhima Yudhistira stated that the competition in the digital banking space has become more complex. 

BNI’s acquisition of Bank Mayora deal can pay off if both lenders combine business loans, short-term online loans, and investment services, he added.

Yudhistira noted that buying smaller rivals is cheaper as compared to building a digital bank from scratch. 

“Bank Mayora has quite a strong credit corporate base to add into BNI’s portfolio. On the product side, Bank Mayora has been developing wealth management [products] with a wide variety, meaning the lender’s infrastructure is not to be underestimated,” Yudhistira added.

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